SlideShare a Scribd company logo

skill

•
•
Stig-Arne Kristoffersen
Stig-Arne Kristoffersen

The oil and gas industry faces major skill shortages due to an aging workforce and lack of experienced professionals entering the industry. Over the next decade, more than half of oilfield professionals will reach retirement age. Younger workers do not have sufficient experience and technical skills to replace retiring experienced workers. This skills gap is reducing industry productivity and oil production. The G20 Training Strategy aims to build connections between education and the job market to improve workforce skills and address these shortages facing the oil and gas sector.

1 of 15
Download to read offline
SKILL SHORTAGE WITHIN THE OIL AND GAS INDUSTRY
Lack of Technical skills
Lack of Management skills
Lack of Leadership skills
Loss of professionals These shortages are mainly the result of demographic challenges. According to a Boston Consulting Group study, Turning the challenge of an older workforce into a managed opportunity, by 2050 the global population aged 60 and over will exceed the number of people aged 15 and under for the first time in history.
Reduction in Production For the oil and gas industry, there are two major business challenges: (i)  reduction in production caused by supply shortages of workers; and (ii)  a reduction in productivity due to an ageing workforce as well as replacement of experienced workers with less experienced workers. These challenges are very real. Two-thirds of the Society of Petroleum Engineers (SPE) membership is now over 40 years old; and according to Cambridge Energy Research Associates (CERA), more than half of all oilfield professionals will reach retirement age in the next decade. In Saudi Arabia, more than 60 % of engineers will have less than ten years’ experience in the next few years. In the Middle East, daily operations in the industry are threatened as a result of unprecedented growth. Overall, the skills shortage has resulted in the use of contract labor on a regular basis in almost all occupations, including senior positions. “The big crew change: Turnover in the oil workforce”, in The Oil Drum: Europe, 17 Mar. 2007. “Fight the talent war”, in Business Management (Cardiff), No. 4, Oct. 2008. G. Thomson: “Tackling the skills gap in the oil and gas sector”, in Holyrood (Edinburgh), 28 Mar. 2011
ILO - G20 Training Strategy “A skilled workforce for strong, sustainable and balanced growth” This Strategy focuses on building bridges between the world of education and training and the world of work. It explains why a skills strategy is needed, outlines a conceptual framework and assembles the essential building blocks of a robust training strategy – including the roles of the social partners
Summary G20 Training Strategy
Access to right skills
Growing Job roles within the Oil and Gas Industry An aging workforce Because of the high level of training and experience required, the oil and gas industry is a middle- aged person’s game. The Society of Petroleum Engineers estimates that up to 50 % of skilled workers could retire within the next 4 to 6 years, presenting an immense challenge to the industry.
Strategic Issues Oil and Gas Companies faces now Due to the technical nature of the industry today, the current open positions cannot be filled by simple laborers. They need to be filled by an individual with technical expertise. New hires need to be experienced engineers and geoscientists who understand the technology, and can make contributions to operations immediately.  According to some reports, it can take anywhere from 7 to 10 years to develop a senior engineer or scientist. The challenge then is attracting young technical workers into the industry today, so that they can take over when the older generation retires in the next 5 to 10 years.
Shaping the supply of talent Some countries will see a 100 percent to 300 percent increase in production from 2010 to 2030, according to Rystad Energy. E&P requires a huge range of operational, technical and commercial skills, ranging from geological and subsurface specialties to complex engineering and project management capabilities. These jobs demand the ability to make decisions that are based on deep and varied experience, in ambiguous and technically challenging situations. Bain industry brief, 2011
Big Crew Change looming ahead Halting the decline of production from the world’s mature fields depends on finding people with the right skills and experience for emerging conditions. Companies are exploring for oil and gas in often difficult-to-access reserves, such as at increasing depths offshore, in the Arctic and in unconventional resources. People with experience in these more unusual conditions are, by definition, more scarce. Even more serious, a shortage in skilled technical talent has major implications for the industry’s entire pipeline of top leadership, which tends to move up from the ranks of experienced managers of skilled technical positions. With what’s known as the Big Crew Change looming ahead, companies face an even more significant challenge: crew change at the top. The industry will have to groom tomorrow’s leaders quickly from thin ranks. Bain industry brief, 2011
The 5 forces behind the talent shortage Bain industry brief, 2011 1.  RAPID INDUSTRY GROWTH 2.  HIGHLY SPECIALIZED AND EXPERIENCED JOBS 3.  AN AGING WORKFORCE 4.  CONSTRAINTS ON SUPPLY 5.  RISING TECHNICAL COMPLEXITY
Build an understanding of the Skill Gap Make an analysis of the mismatch between supply and demand makes these challenges visible. Understanding the demand side begins with some fundamental questions: What will the business look like over the next five years? How are the business’s needs changing? How many employees will the company need in each discipline, sub-discipline, geography or functional unit? What skills does existing people have? What skills must new people have? Construct scenarios based on quantitative factors like the number of new wells and active rigs, and qualitative factors like technical complexity and portfolio needs. How many mission-critical workers, such as geologists and well engineers, do we have in each key discipline? What are their experience levels? How rapidly are workers gaining the experience they need?

More Related Content

skill

  • 1. SKILL SHORTAGE WITHIN THE OIL AND GAS INDUSTRY
  • 5. Loss of professionals These shortages are mainly the result of demographic challenges. According to a Boston Consulting Group study, Turning the challenge of an older workforce into a managed opportunity, by 2050 the global population aged 60 and over will exceed the number of people aged 15 and under for the first time in history.
  • 6. Reduction in Production For the oil and gas industry, there are two major business challenges: (i)  reduction in production caused by supply shortages of workers; and (ii)  a reduction in productivity due to an ageing workforce as well as replacement of experienced workers with less experienced workers. These challenges are very real. Two-thirds of the Society of Petroleum Engineers (SPE) membership is now over 40 years old; and according to Cambridge Energy Research Associates (CERA), more than half of all oilfield professionals will reach retirement age in the next decade. In Saudi Arabia, more than 60 % of engineers will have less than ten years’ experience in the next few years. In the Middle East, daily operations in the industry are threatened as a result of unprecedented growth. Overall, the skills shortage has resulted in the use of contract labor on a regular basis in almost all occupations, including senior positions. “The big crew change: Turnover in the oil workforce”, in The Oil Drum: Europe, 17 Mar. 2007. “Fight the talent war”, in Business Management (Cardiff), No. 4, Oct. 2008. G. Thomson: “Tackling the skills gap in the oil and gas sector”, in Holyrood (Edinburgh), 28 Mar. 2011
  • 7. ILO - G20 Training Strategy “A skilled workforce for strong, sustainable and balanced growth” This Strategy focuses on building bridges between the world of education and training and the world of work. It explains why a skills strategy is needed, outlines a conceptual framework and assembles the essential building blocks of a robust training strategy – including the roles of the social partners
  • 10. Growing Job roles within the Oil and Gas Industry An aging workforce Because of the high level of training and experience required, the oil and gas industry is a middle- aged person’s game. The Society of Petroleum Engineers estimates that up to 50 % of skilled workers could retire within the next 4 to 6 years, presenting an immense challenge to the industry.
  • 11. Strategic Issues Oil and Gas Companies faces now Due to the technical nature of the industry today, the current open positions cannot be filled by simple laborers. They need to be filled by an individual with technical expertise. New hires need to be experienced engineers and geoscientists who understand the technology, and can make contributions to operations immediately.  According to some reports, it can take anywhere from 7 to 10 years to develop a senior engineer or scientist. The challenge then is attracting young technical workers into the industry today, so that they can take over when the older generation retires in the next 5 to 10 years.
  • 12. Shaping the supply of talent Some countries will see a 100 percent to 300 percent increase in production from 2010 to 2030, according to Rystad Energy. E&P requires a huge range of operational, technical and commercial skills, ranging from geological and subsurface specialties to complex engineering and project management capabilities. These jobs demand the ability to make decisions that are based on deep and varied experience, in ambiguous and technically challenging situations. Bain industry brief, 2011
  • 13. Big Crew Change looming ahead Halting the decline of production from the world’s mature fields depends on finding people with the right skills and experience for emerging conditions. Companies are exploring for oil and gas in often difficult-to-access reserves, such as at increasing depths offshore, in the Arctic and in unconventional resources. People with experience in these more unusual conditions are, by definition, more scarce. Even more serious, a shortage in skilled technical talent has major implications for the industry’s entire pipeline of top leadership, which tends to move up from the ranks of experienced managers of skilled technical positions. With what’s known as the Big Crew Change looming ahead, companies face an even more significant challenge: crew change at the top. The industry will have to groom tomorrow’s leaders quickly from thin ranks. Bain industry brief, 2011
  • 14. The 5 forces behind the talent shortage Bain industry brief, 2011 1.  RAPID INDUSTRY GROWTH 2.  HIGHLY SPECIALIZED AND EXPERIENCED JOBS 3.  AN AGING WORKFORCE 4.  CONSTRAINTS ON SUPPLY 5.  RISING TECHNICAL COMPLEXITY
  • 15. Build an understanding of the Skill Gap Make an analysis of the mismatch between supply and demand makes these challenges visible. Understanding the demand side begins with some fundamental questions: What will the business look like over the next five years? How are the business’s needs changing? How many employees will the company need in each discipline, sub-discipline, geography or functional unit? What skills does existing people have? What skills must new people have? Construct scenarios based on quantitative factors like the number of new wells and active rigs, and qualitative factors like technical complexity and portfolio needs. How many mission-critical workers, such as geologists and well engineers, do we have in each key discipline? What are their experience levels? How rapidly are workers gaining the experience they need?